Obamacare, Part II

Monday

Mar 28, 2011 at 12:01 AM

The anniversary of the Affordable Care Act last week brings new reason to consider a major health-care announcement by Massachusetts Gov. Deval Patrick. Almost five years into his state's Romneycare plan, it turns out that spending is out of control, threatening public-sector budgets and private-sector wealth generation.

The solution to this government-created mess, Patrick told the Greater Boston Chamber of Commerce last month, is more government control -- or health-care reform Part II, as some are calling it. Americans in the other 49 states should pay attention.

Massachusetts is the blueprint for Obamacare, and Patrick is among those who want his state's plan to serve as a national model.

The first part of Patrick's proposed solution is mandating managed care -- the old health maintenance organization, or HMO, repackaged as an "accountable care organization" (ACO) -- under which Big Medicine makes more money the less care it provides.

"Clearly we are going to have less resources," Gary Gottlieb, chief executive of Partners HealthCare in Massachusetts, said at a health-care conference in November. Gottlieb was pondering the future for health-care providers, insurers and patients under a so-called global payment system, by which providers are given a set fee for a patient's care. "The most extraordinary ICU and the most extraordinary technology, without necessarily the evidence that it extends life ... is not going to be accessible to us."

The second part is old-style Big Government. Patrick wants government bureaucrats to review and approve prices in the contracts between insurance companies and medical providers.

"We have a big stick on us today," Andrew Dreyfus, chief executive of Blue Cross Blue Shield of Massachusetts, said while standing next to Patrick after his speech. Dreyfus noted that Patrick's proposal was designed to control provider rates by limiting what insurers could pay. "It's very clear from the governor that if that doesn't happen, it's likely we'll see even bigger sticks coming our way," he said.

The first to feel the sting will be Massachusetts state employees, Medicaid recipients and individuals enrolled in the highly subsidized state insurance plans. Patrick wants to put them in managed-care plans forthwith.

There is talk across the nation of a failed health-care payment system, under which providers, who are reimbursed for services, make more money the more care they provide. There is less frank talk of the alternative: a managed-care system in which providers make less money -- or even lose money -- the more care they provide.

The first system makes health care like every other industry, whether highly regulated utilities, car companies or advertising agencies. The second structure -- get paid more for doing less -- has little precedent in a market-based system, though government has implemented it in some areas to much ridicule, such as paying farmers not to farm.

Under the first structure, a sick patient is a revenue center for a physician, clinic or hospital and is therefore sought after, catered to and welcomed. In the second, a patient is a cost center and, over time, the opposite must be true.

There may be scientific reasons to sign up for managed care in a diverse health-care system that offers choice. But who would freely choose a system based on rationing?

Once everyone is in a government-dominated system, the security-conscious will have few options and little choice but to acquiesce to the architects' designs. Massachusetts residents supported Romneycare, but now they face mandated managed care. Many providers and insurers offered their credibility to the Romneycare effort, thinking that it would expand access to care without undermining their fiscal health. They will now be bargaining with bureaucrats over pricing.

In Massachusetts health care, the first fib was told by then-Gov. Mitt Romney, who declared that he could radically expand government health care without it costing more. "Every uninsured citizen in Massachusetts will soon have affordable health care and the cost of health care will be reduced," he wrote in the Wall Street Journal in April 2006.

Despite this declaration, backers of the Massachusetts system now maintain that Romneycare was never about controlling costs but simply expanding access to insurance.

Five years in, Bay State residents are being told that global budgets, price controls and rationed care are not only necessary but good for their health. Terry Dougherty, director of MassHealth, said recently, "I like the market, but the more and more I stay in it, the more and more I think that maybe a single payer would be better."

Don't believe it. But do believe this -- single payer is the logical and, indeed, likely extension of Romney-Obamacare.

SPECIAL TO THE WASHINGTON POST

Sally C. Pipes is president and chief executive of the Pacific Research Institute. Her most recent book is "The Truth About Obamacare."

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